Argentine farmers taking advantage of high corn prices

• The estimate is that farmers’ net profit will be $150 per metric ton ($3.81 per bushel) more with corn.

• With this kind of incentive, some analysts predict corn acreage could increase from four million hectares (10 million acres) to seven million hectares (17.5 million acres) within the next three to five years.

More About:

Acres planted to corn surged in Argentina this fall, reported Kurt Shultz, U.S. Grains Council director in Latin America, who explained that Argentine farmers will make a better profit from corn than from soybeans for the first time ever.

“The estimate is that farmers’ net profit will be $150 per metric ton ($3.81 per bushel) more with corn,” Shultz said.

“With this kind of incentive, some analysts predict corn acreage could increase from four million hectares (10 million acres) to seven million hectares (17.5 million acres) within the next three to five years.”

The situation, he noted, is fluid and depends in part on Argentine government decisions. Based on these figures, the natural assumption is that the government will expand export quotas from 15 to 19 million metric tons (591 to 749 million bushels) to get rid of surplus production.

However, Shultz further commented that “government policy in Argentina is very unpredictable, so issues such as import restrictions on fertilizer or a currency devaluation add a tremendous amount of uncertainty to the outlook.”

Weather has also been an uncertainty in the Argentine outlook. As of Dec. 17, dry weather dominated central and northern Argentina, reducing the moisture available for crop development. For most major producers of summer crops (including corn), rainfall was well below 10 millimeters (4/10 of an inch).

The lower Parana River Valley recorded a third week of unfavorable dryness as early planted corn was advancing through reproduction.